Organizational Design and Organizational Design and ControlControl

Chapter 18Chapter 18

Organizational StructureOrganizational Structure

What is it?What is it? What does it demonstrate?What does it demonstrate?

Organizational DesignOrganizational Design ConsiderationsConsiderations Two concernsTwo concerns

Departmentalize and take advantage of Departmentalize and take advantage of efficienciesefficiencies

Coordinate activitiesCoordinate activities Four primary dimensionsFour primary dimensions

Evolution of International Evolution of International CompanyCompany

International International BusinessBusiness

Evolution of International Evolution of International CompanyCompany

Global Corporate Form- ProductsGlobal Corporate Form- Products

Evolution of International Evolution of International CompanyCompany

Global Corporate Forms- Geographic Global Corporate Forms- Geographic RegionsRegions

Evolution of International Evolution of International CompanyCompany

Global Corporate Forms- FunctionalGlobal Corporate Forms- Functional

Evolution of International Evolution of International CompanyCompany

Hybrid OrganizationHybrid Organization ExamplesExamples

Matrix OrganizationMatrix Organization ProblemsProblems Matrix overlayMatrix overlay

Strategic Business UnitsStrategic Business Units Changes in Organizational FormsChanges in Organizational Forms

Current Organizational Current Organizational TrendsTrends

Virtual CorporationVirtual Corporation OutsourcingOutsourcing

ModularModular AdvantagesAdvantages DisadvantagesDisadvantages

HorizontalHorizontal BenefitsBenefits

Corporate Survival in the 21Corporate Survival in the 21stst Century Century Dynamic network structureDynamic network structure

ControlControl

What is it?What is it? Subsidiaries v. AffiliatesSubsidiaries v. Affiliates

Where are Decisions Made?Where are Decisions Made? Product and equipment Product and equipment Competence of subsidiary management and Competence of subsidiary management and

HQ reliance on itHQ reliance on it Size and age of the international corporationSize and age of the international corporation Benefiting the enterprise to detriment of Benefiting the enterprise to detriment of

subsidiarysubsidiary Subsidiary frustrationSubsidiary frustration

Where is Decision Made?Where is Decision Made?

Product and Equipment Product and Equipment Standardize?Standardize?

Competence of Subsidiary Management Competence of Subsidiary Management and HQ Reliance on Itand HQ Reliance on It Moving executives aroundMoving executives around Understanding host country conditionsUnderstanding host country conditions How far away is host country?How far away is host country?

Size and Age of the International Size and Age of the International CorporationCorporation EstablishedEstablished Smaller/newerSmaller/newer

Where is Decision Made?Where is Decision Made?

Benefiting the Enterprise to Detriment of Benefiting the Enterprise to Detriment of SubsidiarySubsidiary Subsidiary detrimentSubsidiary detriment Moving production factorsMoving production factors Which subsidiary gets the order?Which subsidiary gets the order? Multicountry productionMulticountry production Whose books profit?Whose books profit?

Subsidiary FrustrationSubsidiary Frustration ManagersManagers

Other Control IssuesOther Control Issues

Joint Ventures and Subsidiaries less than 100%Joint Ventures and Subsidiaries less than 100% Lack of freedom and flexibilityLack of freedom and flexibility Control can be hadControl can be had

Four methodsFour methods ReportingReporting

FinancialFinancial TechnologicalTechnological Market opportunitiesMarket opportunities Political and economicPolitical and economic

De-jobbingDe-jobbing DefinitionDefinition Hierarchy implodesHierarchy implodes TraitsTraits

Overall Control IssuesOverall Control Issues